Allegations council employees linked to the Rebels motorcycle club have been using standover tactics against staff have prompted an inquiry at City Hall.

The revelation came from Lord Mayor Graham Quirk in response to questioning from Opposition Leader Milton Dick on Tuesday.

Though Cr Quirk said he only became aware of the issue when media reports first surfaced at the weekend, the Lord Mayor said complaints from staff brought about the investigation, which began in November.

It is understood the Ethical Standards Department inquiry follows claims senior figures at council depots were afraid to discipline three men for insubordination and intimidating behaviour because of their ties to the outlaw bikie club.

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The council employees at the centre of the investigation are also said to have made threats against other depot workers and their families.

But Cr Quirk said he did not believe the problem was widespread, or that council recruiters knew about the supposed bikie affiliation before the men were employed.

“I don't believe that was the case,” he said.

“Suffice to say, Madam Chairman, that I don't think this is an endemic problem in council.

“We are talking here about two or three individuals – they are the number of employees that we understand to be under investigation.”

Cr Quirk said the matter was of grave concern “if it is found that these allegations are proven”.

The investigation is ongoing.

It follows a national police operation carried out last year in which 24 local members of the Rebels - Australia's largest outlaw motorcycle club - were arrested on 121 criminal charges.